Annual Report FY 2010-11 - Pipavav Shipyard

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Pipavav Defence and Offshore Engineering Company Limited 4. The Company is constructing its integrated shipyard projects comprising two units, viz., Special Economic Zone (SEZ) and Export Oriented Unit (EOU), situated at Amreli in Gujarat. Certain facilities at the above mentioned units have already been commissioned and others are still under construction / commencement. The Project Development Expenditure (included under Capital Work-in-Progress) is as under: (Rs. in Lacs) Particulars of Expenses 2010-2011 2009-2010 Opening Balance 38,309.67 55,513.24 Add: Rent 92.92 83.05 Salaries Wages and Allowances 817.82 983.46 Contribution to PF and Other Fund 14.91 34.29 Welfare and Other Amenities 36.02 54.54 Legal, Professional and Consultancy Charges 172.27 1,107.80 Conveyance, Travelling and Vehicle Expenses 158.11 237.42 Rates and Taxes 56.77 876.34 Insurance 77.85 60.31 Communication Expenses 16.50 30.31 Repairs & Maintenance – Building 29.37 - Repairs & Maintenance – Others 82.35 79.96 Miscellaneous Expenditure 156.59 184.12 Interest on Fixed Loans 7,319.88 7,416.52 Interest on Debentures 464.54 - Interest Others - 1,168.76 Bank and Financial Charges 125.50 697.46 Sub Total - 47,931.07 68,527.58 Less : Miscellaneous Income - 1.81 Balances Written Back 145.59 61.65 CST Recoverable - 153.62 Sub Total - 145.59 217.08 Less: Allocated to Fixed Assets 4,544.15 30,000.83 Closing Balance 43,241.33 38,309.67 5. Investments (Other than Associates) are as under: Particulars Numbers Face Value As at (Rs. in Lacs) As at 31.03.11 31.03.10 (Rs.) 31.03.11 31.03.10 Long Term Investments, (Unquoted) Government and Other Securities (Other than Trade) 6 years National Savings Certificate (Deposited with Sales Tax Department) - - - 0.05 0.05 Current Investments (Other than Trade, Unquoted) 0.05 0.05 Kotak Floater Long Term Growth* SBI - Magnum Insta Cash Fund -Daily 5,469,316.83 5,469,316.83 10.00 792.90 778.91 Dividend Option 2,985,637.76 - 10.00 500.10 - Religare Ultra Short Term Fund-Institutional Daily Dividend 100,501.41 - 10.00 1,006.74 - 2,299.74 778.91 �� Total 2,299.79 778.96 * Pledged with a financial institution for guarantee facilities availed from them. 92
Annual Report 2010-11 6. As approved by the Shareholders in Extra-Ordinary General Meeting held on September 7, 2010, the Company has issued 2,52,21,612 Convertible Share Warrants to SKIL Infrastructure Limited, the Promoters of the Company, having a currency period of eighteen months from the date of issue of Share Warrant i.e. September 22, 2010. Each Share Warrant provides the holder an option to convert it into one fully paid up Equity Share of Rs. 10/- each at an exercise price of Rs. 99.10 per equity share. The company has received Rs. 6,254.96 Lacs upto March 31, 2011 against the above Convertible Share Warrants. No Share Warrants have been converted during the year. 7. During the year, the company has decided to value the inventories of its major raw materials viz. steel plates, profiles & equipments on Specific Identification Method as against Weighted Average Method. This change in method of valuation has resulted into inventory of raw materials higher by Rs.179.11 Lacs and consumption of raw materials lower by the equal amount & the profit for the year lower by Rs. 75.40 Lacs. 8. The Company has issued a Bond-cum-Legal Undertaking for Rs. 33,400 Lacs (Previous Year Rs. 33,400 Lacs) in favour of President of India acting through Development Commissioner of Kandla Special Economic Zone for setting up a SEZ unit for availing exemption from payment of duties, taxes or cess or drawback and concession etc. and a General Bond in favour of the President of India for a sum of Rs. 15,300 Lacs (Previous Year Rs. 15,300 Lacs) a security for compliance of applicable provisions of the Customs Act, 1962 and the Excise Act, 1944 for EOU unit. 9. In the Opinion of the Management, the Current Assets, loans and Advances are approximately of the value stated, if realized in the ordinary course of business. 10. As per the Revised Guidelines for the Shipbuilding Subsidy issued by the Government of India on March 25, 2009, the Company is eligible for subsidy at the rate of 30% of the contract price, in respect of the export order received for vessels for which the contracts with the customers were signed on or before August 14, 2007. Accordingly, Government Subsidy of Rs. 7,494.13 Lacs for the year (Previous Year Rs. 8,814.91 Lacs) has been recognised as revenue in respect of Ships under construction on proportionate completion basis. 11. Advances recoverable in cash or in kind or for the value to be received in Schedule 10 includes Rs. 5,943.43 Lacs (Previous Year Rs. 3,871.47 Lacs), being the Cenvat/VAT/Central Sales Tax paid on the purchase of goods and services for the project. The company has been legally advised that such amounts are recoverable. Any unrealized amounts will be added back to the cost of the project or charged off to the profit & loss account, as the case may be, in the year of settlement. 12. The company has received two show cause notices in its 100% EOU unit from the Office of the Commissioner of Central Excise, Bhavnagar and Directorate of Revenue Intelligence which mainly relates to availment of Cenvat/Customs Duty/ Service Tax Credit availed on inputs/services used for Construction of Dry Dock and Goliath Cranes and Non-submission of original evidences/documents. The company has also received five show cause notices in its SEZ Unit from the Office of the Assistant Commissioner of Service Tax, Bhavnagar, mainly relates to non submission of original evidence / documents. The company does not forsee any losses on this account. 13. Managerial Remuneration: a) Remuneration to the Director Particulars 2010 – 2011 (Rs. in Lacs) 2009 – 2010 Salaries 390.00* 264.60 Contribution to Provident Fund 7.20 7.20 Perquisites and other allowances 0.40 0.40 Total 397.60 272.20 * include Rs. 150 Lacs provided subject to prior approval of Central Government. Liability for Gratuity and Leave Encashment is provided on actuarial basis for the Company as a whole, the amounts pertaining to the Director is not ascertainable and therefore not included above. b) The computation of net profit for the purpose of directors remuneration under section 349 of the Companies Act, 1956, have not been enumerated since no commission has been paid to any of the directors. Fixed Managerial �� Remuneration has been paid to the whole time director. 93
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PIPAVAV DEFENCE AND OFFSHORE ENGINE
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SKIL Infrastructure Limited, the pr
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State-of-the-art Infrastructure Ahe
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lowered in the dry dock with the he
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“ I am truly impressed by the com
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Pipavav Defence and Offshore at a g
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16 During the year, your Company ac
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18 Financial snapshot Profit before
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20 Board of Directors Mr. Nikhil P.
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Board of Directors Mr. Nikhil Gandh
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Annual Report FY 2010-11 - Pipavav Shipyard

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